Thursday, July 7, 2016

Suicide Bombers Strike Baghdad -- Mideast On Edge -- July 7, 2016

Link here.
Militants fired mortars on a Shiite shrine north of Baghdad late on Thursday, and in the confusion that followed, three suicide bombers in military uniforms infiltrated the compound and blew themselves up.
At least 36 people were killed and more than 40 were wounded.
The work of the JV Team? An act of desperation? If so, it's the fourth coordinated "act of desperation" in the past ten days or so. I would hate to see what the JV Team could do if it weren't losing the war. 

Whoever called ISIS the "JV Team" -- fathomless ignorance.

Of course, this may not be ISIS-related.

Did ATA Cause The Earthquake In The Las Vegas Area Earlier Today? Where Are All The Hurricanes? -- July 7, 2016

The 4.5 magnitude earthquake that hit the Las Vegas area earlier today is being blamed, by some, on anthropogenic tectonic activity:
Was this quake caused by ATA (anthropogenic tectonic activity)? Caused by the concentration of people in certain localities? How can we stand by and allow more earthquakes caused by an ATA? The way to stop this is a global tax on people who are located in the wrong areas. Of course I will personally collect all that tax money to make sure it is fairly distributed. Don’t stand in our way, the science is settled. ATA is the worst disaster facing humanity.
I can't make this stuff up. If it appears on the internet, it must be true.

Speaking of which, what happened to all the hurricanes? It was my understanding that the energy from warm ocean water -- the surface of the ocean, mind you --was the cause of hurricanes and with global warming, there should be a record number of hurricanes in the Gulf of Mexico. In fact, there has been a ten-year lull in hurricane activity and not one hurricane yet this season. Just saying.

And speaking of which, Arctic ice extension is up, way beyond the mean. It should be decreasing now, by July, and it is not. Certainly it's just an anomaly; the science is settled, saith Algore.

Later, from a reader, regarding that Arctic ice extension:
June saw a marked shift to low pressure over the central Arctic Ocean. This type of pattern is known to inhibit ice loss. A low pressure pattern is associated with more cloud cover, limiting the input of solar energy to the surface, as well as generally below average air temperatures.
Note: Arctic ice extent is currently well below "normal/average" (despite a little two week upward wiggle) is expected at the end of a El Nino cycle.
It'll continue to drop for a couple months, but will be trending upward "on average" for the next 10 years. The reader's guess is a recent U of Illinois report suggesting a significant summer increase in ice extent, was based on poor data...or just the little wiggle.

QEP To Report Six Nice Wells Friday -- July 7, 2016

Seven (7) wells coming off the confidential list Friday:
  • 30707, 595, QEP, State 7-25-24BH, Spotted Horn, 4 sections, middle Bakken, 50 stages, 10 million lbs, t3/16; cum 24K 5/16;
  • 30708, 375, QEP, State 4-25-24TH, Spotted Horn, 4 sections, Three Forks, 50 stages, 9.9 million lbs, t3/16; cum 10K after 1.5 months;
  • 30906, 1,110, QEP, State 4-36-1T2H, Spotted Horn, 4 sections, Three Forks second bench, 49 stages, 8.8 million lbs, t3/16; cum 22K after 1.5 months;
  • 30907, 648, QEP, State 8-36-1BH, Spotted Horn, 4 sections, middle Bakken, 49 stages, 9.2 million lbs, t3/16; cum 22K after 1.5 months;
  • 30908, 564, QEP, State 4-36-1TH, Spotted Horn, 4 sections, Three Forks, 49 stages, 9.2 million lbs, t3/16; cum 10K after 1.5 months;
  • 30909, 1,036, QEP, State 7-36-1BH, Spotted Horn, 4 sections, middle Bakken, 48 stages, 9.6 million lbs, t3/16; cum 38K 5/16;
  • 31978, drl, Statoil, Lougheed 2-11 5H, Todd, no production data, 
30909, see above, QEP, State 7-36-1BH, Spotted Horn:

DateOil RunsMCF Sold

30908, see above, QEP, State 4-36-1TH, Spotted Horn:

DateOil RunsMCF Sold

30907, see above, QEP, State 8-36-1BH, Spotted Horn:

DateOil RunsMCF Sold

30906, see above, QEP, State 4-36-1T2H, Spotted Horn:
DateOil RunsMCF Sold

30708, see above, QEP, State 4-25-24TH, Spotted Horn:

DateOil RunsMCF Sold

 30707, see above, QEP, State 7-25-24BH, Spotted Horn:

DateOil RunsMCF Sold
Active rigs:

Active Rigs3075189188213

One new permit:
  • Operator: North Range Resources
  • Field: Rough Rider (McKenzie)
  • Comments: to the best of my knowledge this is the first time I've mentioned "North Range Resources" on the blog. Over at the NDIC "well search" data base, there are three North Range Resources, LLC, permits: a 1980 wells is now a SWD well; a 1995 well is on inactive status, and this new permit.
Thirteen wells came off the confidential list today but eleven (11) of them were PNC (permits cancelled). See below. The other two wells were reported earlier. Eleven permits were canceled:
  • Hess (11), six BL-Olson permits in Williams County, and five BL-Ramberg permits, also in Williams County.
Two producing wells were completed:
  • 31556, 319, Hess, HA-Chapein-152-95-2932H-6, Hawkeye, 36 stages, 2.45 million lbs, t3/16; cum 10K after 51 days;
  • 31919, 1,413, Oasis, Johnsrud Federal 5198 11-18 3BX, North Tobacco Garden, t6/16; cum --

Coming Very Close To 10 Million Bbls/Day Gasoline Supplied In The US -- July 7, 2016

US gasoline "supplied" hit a record for the first week in July: 9.755 million bbls/day. We have exceeded that number on very few other occasions (although I may have missed some at this link).

For comparison, one year ago, the first week in July, 2015, gasoline supplied was 9.532 million bbls per day.

That's an increase of 2.339%.

It looks like the record amount of gasoline supplied last summer was 9.749 million bbls/day -- the third week of July, 2015.

If there is a similar 2.339% increase in gasoline supplied year-over-year, we will come up just short of the 10 million bbls/day which, to the best of my knowledge, has never been passed. We would hit 9.977 million bbls in the third week of July, 2015.

Note: I may have missed some record weeks, and/or incorrectly calculated something.

Uber, Lyft And Airport Rules - July 7, 2016

Link here. The  list is not all-inclusive.

  • DFW
  • LAX
  • Washington, DC
  • JFK 
  • Seattle
  • Minneapolis
  • New Orleans
Not allowed:
  • Atlanta
  • Philadelphia
  • Boston
  • Detroit
  • Orlando, FL
Uber only, not Lyft:
  • Newark, NJ
  • Houston
  • Kansas City
Lyft only, not Uber:
  • Miami

North Dakota Wind Farm Approved; Almost $2 Million/MW; Another Small Science Project -- July 7, 2016

I'm posting this mostly for the archives, to keep track of the cost of installing unreliable energy. It's also interesting to note how small these unreliable energy farms are in comparison to natural gas plants.

The Lackawaana Energy Center, for example, a newly proposed natural gas plant in Pennsylvania (posted earlier) will be a 1,500 MW plant (posted earlier today). Compare with this wind farm proposed for southwestern North Dakota:
  • final chapter of the Brady Wind farm saga
  • ND PSC approved NextEra Energy Resources Brady Wind II
  • northern Hettinger County
  • 72 turbine
  • 150-MW
  • $250 million 
  • Brady Wind I: Stark County, 87 turbines
At $250 million, Brady Wind II works out to $1.7 million/MW. At $1.7 million/MW, this is exactly in line with the EIA figures posted in June, 2016, in which the government calculated it cost an average of almost $1,900/MW to build a new wind farm compared to less than $1,000/MW for a new natural gas plant. Unaccounted-for-costs widen the gap.

I suppose what bothers me the most is how much effort is wasted putting in these bird-killing machines, these small science projects that have absolutely no redeeming value.

Update On Davis Refinery Proposed For Belfield, ND, Area

At The Dickinson Press:
  • a gazillion more steps in this process, but Billings County approved the rezoning of 715 acres of land from agricultural to industrial use
  • 55,000 bopd refinery
  • proposed by California-based Meridian Energy Group Inc
  • $900 million -- almost $1 billion
  • location: just outside the town of Fryburg; Fryburg is about 5 miles west of Belfield
  • location: about three miles from the edge of Theodore Roosevelt National Park 
Whiting has a huge presence in this area. Fryburg is also a major area for convergence of pipelines.

I would assume tax receipts are affected immediately upon rezoning.

Lake Mead "Low" Level Hits New Record? Into "Ration Regime 1" For First Time In History? -- July 7, 2016

Link here. This is a dynamic link. This was posted on July 7, 2016. The graph clearly shows Lake Mead level below "Ration Region 1" level. It's hard to say if it "crossed the line" early this year.

According to WBUR, May 31, 2016, Lake Mead was at historic lows:
The water level at Lake Mead, the largest reservoir in the country, is the lowest it's ever been.

The man-made lake, which straddles the Nevada-Arizona border and provides water to Arizona, California, Nevada and Mexico, is now only about 37 percent full, and the water level is expected to keep dropping over the next month or so.

If the water level at Lake Mead doesn't rise above a certain threshold again by the end of the year, it would trigger a water shortage declaration that could have major consequences for parts of the West.
One wonders if Sacramento lawmakers have been focused on the wrong things. The current historic low was predicted almost exactly one year ago.

President Obama's Legacy
First US President To Have Waged War 
The Entire Eight Years Of His Two Term Presidency

On May 15, 2016, I posted:
Who would have thought?

From The New York Times, President Obama will be the first US president to have waged war the entire eight years of his two term presidency. And doesn't have much to show for it. The JV team scored again over the weekend in Yemen and Iraq.
Now today it's being reported in The Wall Street Journal that President Obama has slowed the withdrawal of troops from Afghanistan. No links; easily found everywhere. 

For Investors, Is This The Sweet Spot?; Oil To $80 In 2017 -- Raymond James -- July 7, 2016


Later, 10:50 a.m. Central Time: a huge whoop -- EPD increases its distribution. From 24/7Wall Street:
It was not that long ago that investors were getting ever more comfortable with the master limited partnership (MLP) segment in energy and infrastructure.
Most investors believed, or hoped, that the MLPs were free from the whims of the price of oil. That proved to be wrong due to the severity of the oil price swing. If there are a few top MLPs with solid management and a track record of managing through hard times, Enterprise Products Partners L.P. would certainly be among the top picks.
Enterprise is the king of MLPs by size ($60 billion market cap), even if 2015 revenue dropped from 2014 and even if revenues are expected to remain muted in 2016 and 2017.
And to show just how well Enterprise is running itself, the outfit just announced that the board of directors of its general partner declared an increase in the quarterly cash distribution paid to partners.
Apparently they must have a lot of cash now that ETE - WMB merger was called off.

Original Post
Right, wrong, or indifferent, investors have been concerned what a "rate increase" would mean for the market. Had it not been for "Brexit" it's very possible we would be hearing a lot of talk about a "imminent rate increase" but "Brexit" put a "rate increase" on hold, according to Janet Yellen. Unless this is a head fake, this should reassure investors no rate increase this year.

But even if that is not enough to make investors comfortable about no rate increase, then the fact that Deutsche Bank says there's a 60% chance of a US recession within the next 12 months would also give the Fed reason to "continue the pause."

And with a new president coming into office next January ... would any Fed president risk her job raising rates just at that moment?

Note: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here or what you think you may have read here. I post this to help me understand the oil and gas industry and to put the Bakken into perspective.

In early morning trading, some of the issues that hit 52-week highs this past week, are now pulling back slightly, a sign of profit trading in a market that is otherwise up a bit.

At midday, there are 111 issues reporting new 52-week highs vs 6 reporting new 52-week lows. Not much catches my eye, except these at new highs: XOM, GE (a huge whoop),  OKE (another big whoop), and, TransCanada (who wudda thought?).

Energy Tweets

Wow, wow, wow: Raymond James -- Brent oil will go to $83/bbl and WTI to $80/bbl in 2017 -- that's next year, folks. But "everyone" else it seems is more bearish. A WSJ survey of fourteen (14) investment banks suggest oil in 2017 will get no higher than $57. I tend to agree with the latter. The "explosive" year for oil prices will be in 2020.

Natural gas inventories still above 10-year maximum.

Texas: top energy-consuming state in 2014 -- 13 quadrillion BTUs.

Refiners are cutting back production; summer driving boom fails to clear excess gasoline stocks.

Update On Panama Canal

As a reminder:
The inaugural ship, Cosco Shipping Panama is a 158-foot-wide, 984-foot-long (slightly longer than three football fields) behemoth that is one of the modern New Panamax class of mega-vessels that are seen as the future of global shipping and will now be able to use the canal. 
  • 158 feet = 48 meters
  • 984 feet =  300 meters
  • So, let's call it 300 x 48
Are there any Newpanamax ships "at" the Panama Canal today? You can track them here. You can easily scroll down the data base and see if any ships are 300 x 48. Today, of the first 10: none. Of the second ten:
  • one, 294 x 32
  • one, 257 x 32
Of the third ten, there is one 294 x 32.

American Auto Sales In China

Ford: up 6%
GM: up 5.3% in 1H16

US Crude Oil Reserves, Green River Formation, Global Impact Of US Energy In The 21st Century -- IBD -- July 7, 2016

The story that the US has more recoverable reserves than either Russia or Saudi Arabia continues to have "legs." This op-ed" in Investor's Business Daily:
Anu Mittal, GAO director of natural resources and environment, in May 2012 told a stunned Congress that just one U.S. energy region -- the Green River Formation, which stretches across parts of Wyoming, Utah and Colorado -- contained an "amount (of oil) about equal to the entire world's proven oil reserves." With oil prices near $100 a barrel at the time, it was hard to believe.

Dubbed our Persia on the Plains, the Green River Formation is estimated to have four times the proven reserves of Saudi Arabia, Mittal testified. While the formation's total reserves are 3 trillion barrels, even at the then-high prices for oil, recoverable reserves were about half that: 1.5 trillion barrels.

Now, four years later, oil prices are down more than half -- in part, because global demand is much weaker than expected, but also because the U.S. fracking and petro-technology boom has created nothing less than an energy revolution. Rest assured: While much of the oil that the U.S. has underground is not recoverable under current market conditions, it will be there when we need it.

And it's also important to remember that 72% of the Green River Formation and much of the rest of our country's oil reserves lie under federal lands. So it will take a president and a Congress willing to "drill, baby, drill" to keep us supplied with energy for centuries to come.

As for "peak oil" proponents and their political pals who scared Americans and influenced U.S. energy policy for years with tales of vanishing supplies and soaring energy prices, it's time to buy a new fright mask. This one doesn't work anymore.
I first blogged about the Green River formation on June 7, 2013, and it is linked at the sidebar at the right. At the time:
An ABC News story from last year, with the headline, "An American Oil Find That Holds More Than All Of OPEC":
A recent report by the U.S. Government Accountability Office estimated that if half of the oil bound up in the rock of the Green River Formation could be recovered it would be "equal to the entire world's proven oil reserves."
Both the GAO and private industry estimate the amount of oil recoverable to be 3 trillion barrels.
I added at the time:
It is nice to see the "three trillion original oil in place." It gives "credibility" to reports that the Bakken could be a trillion-bbl-OOIP-reservoir.
Over at "Big Stories," I have a number of stories on the US energy revolution. I still maintain that the biggest economic story for the 21st century will be US energy. I've said that for quite some time.

"Top Ten" North Dakota Products You Must Try" -- Item -- July 7, 2016

Don caught this item, a list of "Top 10" North Dakota products "that you must try. Several items caught my eye, particularly the honey. However, I was most curious about #3 on the list: Dot's Homestyle Pretzels. They are available on Amazon. com. Look at the comments regarding these pretzels. I may order some.

Record Cushing Storage; Update On PADD 2 Storage -- RBN Energy; How Badly Is Russia Being Pinched By Oil Prices? -- July 7, 2016

Active rigs:

Active Rigs3075189188213

RBN Energy: "I still haven't found all the crude storage I'm looking for -- PADD 2."
The famous Field of Dreams misquote “If you build it, they will come” certainly has proved true for the midstream companies that added a record 18.7 million bbls of crude oil storage capacity in PADD 2 in late 2015 and early 2016.
During that six-month period, crude inventories in PADD 2 blasted 24.4 million bbls higher to a record 155.6 million bbls
And while PADD 2 oil stockpiles have been shrinking somewhat in recent weeks, they remain above 150 MMbbl—a mark the PADD had never seen before this year. Storage levels have been particularly high at the Cushing, OK, storage and distribution hub within PADD 2.
Why is so much crude being socked away?  Today, we continue our look at the new storage capacity being added in the U.S., and at why demand for storage has been so high.
Jobs, the weekly spin: tumble 16,000 to 254,000; four-week average dipped slightly to 264,750. It looks like we may have finally turned the corner.

Norway oil service firms, unions fail to agree to wage deal. Link here. [UPDATE, 58 minutes ago: agreement reached; strike averted.]

How badly is Russia getting pinched by low crude oil prices? Link here. See notes below.

Us oil boom is not dead. It's plotting a 2017 comeback. Link here.

Pennsylvania to get power from shale gas. Link here.
How Badly Is Russia Being Pinched?
From the linked article above:
  • Russia is the world's top energy exporter
  • Russia is enduring the longest economic downturn of Putin's 16-year rule
  • crude oil export duties and extraction taxes cover 23% of Russia's budget
  • Russia is running the widest deficit since 2010
Cabot Oil & Gas Signs 10-Year Sales Agreement 
To Be Sole Supplier Of Natural Gas For New 1,500 MW Plant
Lackawanna County, Pennsylvania

From the linked article above:
  • energy landscape in Pennsylvania shifting away from coal
  • the state still relies on coal for about 40% of its electricity
  • the Lackawanna Energy Center will be one of the most efficient power plants in the country
  • full-scale operations by end of 2018
  • Cabot's NG production from the Marcellus shale basin increased 10% in 1Q16 over 4Q15
The Coming Boom In 2017

From the linked article above, which was not a particularly useful article; mostly filler:
  • "OPEC has hardly dealt the US oil boom a death blow"
  • Goldman Sachs recently predicted US production would continue to fall in 2016, but then would climb again in 2017
  • US production still twice what it was just before President Obama took office
  • reiterates that US, with 264 billion bbls of oil reserves, has more reserves than either Russia or Saudi Arabia
  • record US crude oil production set in April, 2015, best month since 1971
The article again emphasizes "rig count" which I think is low on the list of important data points to follow.

There was a report out yesterday that 4,000 DUCs across the US have 2 billion bbls of oil ready to be pumped.

In the Bakken:
  • many wells choked back
  • 1,500 inactive wells
  • 900 DUCs
  • pad drilling
  • drilling sweet spots
  • halo effect
  • better completion techniques